SEC Chairman Paul Atkins on IPO trends and tokenization

INCLUDES A WARNING TO INVESTORS THAT AI MAY POSE, QUOTE, EXISTENTIAL RISKS TO HUMANITY. JOINING US RIGHT NOW WITH MORE ON THE IPO REVIEW PROCESS. SO MUCH MORE GOING ON IN THE REGULATORY ENVIRONMENT. SEC CHAIRMAN PAUL ATKINS IS WITH US RIGHT HERE IN WASHINGTON DC. IT'S GREAT TO SEE YOU IN PERSON. >> YES. GREAT TO HAVE YOU DOWN HERE. >> IN WASHINGTON. I'M IMAGINING YOU'RE GOING TO SAY, LOOK, I CAN'T TALK ABOUT A SPECIFIC COMPANY OR A SPECIFIC PROSPECTUS, BUT I WANT YOU TO HELP US JUST UNDERSTAND HOW YOU REVIEW A PROSPECTUS, THE KIND OF LANGUAGE AND RISKS AND HOW THAT PROCESS WORKS, ESPECIALLY BECAUSE WE'RE ALL HEARING ABOUT HEADLINES LIKE THIS AND TRYING TO UNDERSTAND WHAT THAT ULTIMATELY MEANS. >> RIGHT? WELL, SO THE PROCESS WORKS, AS WOULD BE ISSUERS OF IPOS WILL FILE AND USUALLY CONFIDENTIALLY AT THE BEGINNING TO GET COMMENTS FROM OUR STAFF WHO REVIEW IT FROM WITH AN EYE TOWARDS OUR MATERIAL ISSUES BEING DISCLOSED BY THE COMPANY IN AN OPEN WAY AND IN A COMPLETE WAY. SO THAT'S THAT'S THE APPROACH. AND THEN THE STAFF CLEARS ITS COMMENTS, AND THERE'S A BACK AND FORTH AND ITERATIVE PROCESS. AND THEN PEOPLE GO. >> TYPICALLY THE KINDS OF RISKS, THOUGH, THAT COMPANIES PUT IN THEIR RISK PROFILES DON'T GO AS FAR AS THE IDEA OF AN EXISTENTIAL RISK TO HUMANITY. SO I'M CURIOUS HOW YOU THINK ABOUT SOMETHING LIKE THAT. >> WELL, SO AGAIN, YOU KNOW, THIS IS WHAT'S, YOU KNOW, THEY NEED TO DISCLOSE IN A COMPLETE WAY THE MATERIAL ASPECTS OF THIS POTENTIAL INVESTMENT. AND YOU'RE RIGHT, THIS IS AN UNUSUAL TYPE OF DISCLOSURE. I HAVEN'T SEEN IT YET. THIS IS BEING HANDLED BY THE STAFF TO THIS POINT. AND SO ANYWAY SO THE STAFF IS IS GIVING THEIR COMMENTS. >> IN PAST NUCLEAR REGULATORY FILINGS FOR FOR FOR A NEW NUCLEAR FACILITY. DID IT SAY I'M SURE THAT THERE WAS SOMETHING MAYBE NOT TO ALL HUMANITY, BUT THERE HAD TO BE SOME PRETTY SCARY RISK FACTORS INCLUDED. WHEN YOU'RE BUILDING A NUCLEAR FACILITY? >> I'M SURE. I'M SURE THAT'S TRUE. BUT BECAUSE AGAIN, YOU KNOW, YOU WANT TO. >> JUST HIGHLIGHT IT. AT THE TIME I OR MAYBE WE DID. >> I'VE BEEN WAITING FOR THIS PROSPECTUS BECAUSE I WANTED TO SEE JUST THIS, BECAUSE MY ASSUMPTION HAS BEEN THAT YOU CAN'T SAY SOMETHING PUBLICLY AS A CEO IS A RISK FACTOR WITHOUT THEN PUTTING IT IN YOUR PROSPECTUS. ANYWAY. SO WE WHAT WE'VE HEARD FROM SOME OF THESE CEOS, YOU WOULD EXPECT THAT IT WOULD HAVE TO WIND UP IN THE STATEMENTS, RIGHT? THE STAFF WOULD NOT ALLOW YOU TO SAY THINGS PUBLICLY THAT YOU DON'T PUT IN THE PROSPECTUS. >> THE STAFF DOES GOOD RESEARCH, AND THAT POSES GOOD QUESTIONS TO TRY TO ELICIT. YOU KNOW, THE DISCLOSURE THAT THAT COVERS ALL THIS. >> WHAT DO YOU THINK RIGHT NOW ABOUT THE HEALTH OF THE IPO MARKET AND MAYBE THE MARKETS MORE BROADLY? I ASKED ABOUT THE IPO MARKET SPECIFICALLY BECAUSE JUST THIS MORNING WE HAD AURA AURORA RING. THESE RINGS POSTPONED THEIR IPO. SB ENERGY POSTPONED ITS IPO BAMBOO SIMILAR. WE NOW HAD A. IT'S NOW WE CAN SAY THERE'S A TREND. THERE ARE COMPANIES THAT ARE PULLING BACK. THAT'S OBVIOUSLY AS TREASURIES GO UP. I'M JUST SORT OF CURIOUS WHAT YOU'RE SEEING RIGHT NOW. AND THEN OF COURSE, THERE'S A CONCERN THAT THIS COULD POSTPONE POTENTIALLY EVEN AN ANTHROPIC IPO, WHICH IS HOLDING UP A LOT OF THE SORT OF ECONOMICS OF THE IPO ECOSYSTEM RIGHT NOW. >> RIGHT. WELL, SO ANDREW, I'M REALLY FOCUSED ON THE LONG TERM. SO IN THE LAST YEAR AND A HALF SINCE I'VE BECOME CHAIRMAN, THERE'S BEEN A WHOLE CHANGE OF ATTITUDE. AND SO AND WE HAVE HAD 583 COMPANIES GO PUBLIC IN THE LAST YEAR AND A HALF. THAT'S UP 75% FROM THE SIMILAR THE LAST THE PREVIOUS YEAR AND A HALF OF THE LAST PART OF THE BIDEN ADMINISTRATION. SO THAT IS AND THEN THE AMOUNT OF MONEY IS 208 BILLION OR SO THAT THESE 583 COMPANIES HAVE RAISED. THAT'S VERY EXCITING. THAT IS TURNING AROUND. WE'RE TRYING TO MAKE IPOS GREAT AGAIN. LOOKING TO THE FUTURE, THERE WILL BE UPS AND DOWNS AS AS MARKET CONDITIONS CHANGE. THAT'S THE WAY IT SHOULD BE. I MEAN, SOMEBODY SHOULDN'T JUST RUSH TO MARKET PELL MELL WITHOUT WITHOUT CONSIDERING THE THE EFFECTS ON ON THEIR BUSINESS AND ON THE, ON, ON THEIR INVESTORS AND ALL THAT. SO I THINK THAT'S GREAT. SO BUT WE ARE FOCUSED ON THE LONG TERM. WE'VE HAD A DEARTH NOW OF IPOS OVER THE LAST OVER THE LAST 30 YEARS, WHERE WE HAVE NOW ABOUT HALF THE NUMBER OF PUBLIC COMPANIES AS WE HAD 30 YEARS AGO. I'M OUT TO CHANGE THAT. I WANT TO MAKE OUR PUBLIC MARKETS, YOU KNOW, THEY ALREADY ARE THE ENVY OF THE WORLD. I WANT TO KEEP THEM STRONG. I WANT TO KEEP THEM, HAVE AN INFLUX OF NEW COMPANIES AND THAT WE'RE ACHIEVING THAT. >> WANT TO PIVOT TO A DIFFERENT TOPIC, WHICH IS MAYBE THE REGULATORY WORLD TOKENIZATION. I KNOW IT'S A TOPIC THAT WE'VE TALKED ABOUT BEFORE. >> NEAR AND DEAR TO MY. >> HEART AND NEAR AND DEAR TO YOUR HEART. ONE OF THE THINGS WE SAW JUST ABOUT A MONTH AGO NOW IS ROBINHOOD EXPLORING TOKENIZATION, TOKENIZED PRODUCT AROUND STOCK. THIS WAS OUTSIDE OF THE UNITED STATES, SO IT WASN'T RIGHT HERE. BUT ADAM ARON, WHO RUNS AMC, THE MOVIE COMPANY OR THEATER COMPANY, I SHOULD SAY, LOOKED AT WHAT WAS GOING ON, WHICH EFFECTIVELY MEANT, LOOK, WHEN I SAY LOOKED AT WHAT WAS GOING ON, LOOKED AT THIS IDEA OF TOKENIZING HIS STOCK AND SAID THIS SHOULD BE ILLEGAL, BECAUSE WHAT HE SAW WAS A COMPANY LIKE ROBINHOOD EFFECTIVELY BUYING THE UNDERLYING STOCK, CREATING A TOKEN ON TOP OF IT THAT WAS EFFECTIVELY LIKE A DERIVATIVE OF THE STOCK. THAT DIDN'T NECESSARILY COME WITH GOVERNANCE RIGHTS, MUCH HARDER TO TRACK FOR INSIDER TRADING, THINGS LIKE THAT. HOW DO YOU SEE THIS TOKENIZED WORLD ULTIMATELY WORKING? >> WELL, WE'RE ADDRESSING THAT. SO AGAIN, IF YOU LOOK BACK AT THE PREVIOUS ADMINISTRATION, BASICALLY THERE WAS JUST A CLOSED DOOR POLICY OF NOT ACCEPTING THESE NEW INNOVATIVE PRODUCTS. AND SO WE'VE CHANGED THAT TO PROVIDE CLARITY TO THE MARKETPLACE, TO INNOVATORS AND INVESTORS ALIKE, STARTING OUT WITH A DEFINITION AND A JOINT INTERPRETATIVE RELEASE WITH THE CFTC TO DEFINE WHAT'S A TOKENIZED SECURITY VERSUS WHAT ARE OTHER SORTS OF TOKENIZED ASSETS. WE'RE IN THE SECURITIES LANE, OBVIOUSLY. AND SO WE ARE FOCUSED. WE HAVE COME OUT WITH A PROPOSED RULE THAT EVEN THOUGH THE CLARITY ACT FAILED IN CONGRESS TO BE ENACTED, YOU KNOW, WE ARE PROCEEDING TO PROVIDE CLARITY TO THE MARKETPLACE AS FAR AS HOW TO RAISE MONEY ON CHAIN. AND THEN, SECONDLY, WITH RESPECT TO TRADING OF TOKENIZED SECURITIES, WE'VE COME OUT WITH AN INNOVATION EXEMPTION. WE'RE CALLING IT. SO THINK OF A SANDBOX WITH A CONTROLLED TYPE OF ENVIRONMENT WHERE COMPANIES ISSUE TOKENIZED SECURITIES THAT REPRESENT THE UNDERLYING RIGHTS AND PRIVILEGES OF THE SECURITY. SO IT'S TRADING THE ACTUAL SECURITY ON CHAIN. AND THAT'S AN IMPORTANT DIFFERENCE THAN WHAT IS BEING DONE OFFSHORE, WHICH